Eircom owner in bid to cut debt

EIRCOM Group owner Singapore Technologies Telemedia Pte asked lenders to cancel €1.75 billion of the phone company’s €3.75bn debt, according to two people with knowledge of the plan.

Under a restructuring plan presented this week, the Singaporean state-owned firm will seek a writedown of 13% from first-lien lenders, or €307 million of their €2.36bn of loans, said the people, who didn’t want to be identified because the talks are private. Junior lenders and noteholders would recover almost none of the €1.3bn they are owed, the people said.

Ireland’s largest phone company is restructuring its obligations after five owners in the past 12 years loaded it with debt to pay for their takeovers. The company said on December 12 that it is weighing STT’s proposal alongside one from its first-lien lenders and another from its second-lien creditors. STT has missed two proposal deadlines, citing economic uncertainty in the eurozone.

STT plans to invest €200m in Eircom in two stages, two people said. STT said on December 12 it is in talks with an Eircom employee trust, which owns 35% of the company, to co-invest.

Ken Cronin, an outside spokesman for STT based in London, declined to comment. Paul Bradley, a spokesman for Dublin-based Eircom, and a spokesman for the company’s first-lien lenders both declined to comment on the restructuring process.